The website thisismoney.co.uk is reporting that 38% of small business owners do not expect their operations to survive the next twelve months, while even more are planning to make redundancies.

Research conducted jointly by the website and Financial Mail found that 66% are planning job cuts, and just over half have had their credit facilities cut by their bankers.

There has long been a sense of pessimism in the small business sector, but the reality could be even worse, according to Nick Palin, the director of finance at the Forum of Private Business (FPB). He said, “Each week the scale of the economic downturn appears to reach new depths…The FPB estimates that as many as 200,000 firms could be forced to close”.

Business owners are undertaking cost cutting measures such as making staff redundant and cutting staff working hours, and this trend shows no sign of slowing.

Palin also said, “Many small businesses are finding they are unable to borrow from the major lenders which, despite pressure from the government and the small business lobby are often still bracketing all small firms as high risk. Some are even having existing overdraft agreements removed completely and with little warning”.

This entry was posted on Monday, January 5th, 2009 at 6:20 pm and is filed under General Debt News. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.